Moneycontrol
Feb 16, 2017 01:21 PM IST | Source: Moneycontrol.com

Buy Britannia Industries; target of Rs 3529: Edelweiss

Edelweiss is bullish on Britannia Industries has recommended buy rating on the stock with a target price of Rs 3529 in its research report dated February 14, 2017.

Buy Britannia Industries; target of Rs 3529: Edelweiss


Edelweiss' research report on Britannia Industries


Britannia Industries’ (Britannia) 5.6% and 0.5% YoY revenue and EBITDA growth, respectively, came in line, while 4.6% PAT spurt slightly surpassed estimates. Overall volumes grew at 2% YoY (7% YoY in Q2FY17) dragged by demonetisation (November revenue fell 10% MoM), but was ahead of category growth leading to market share (MS) gains.


Outlook


Though input price inflation (up 10% YoY) continued to pinch gross margin (down 229bps YoY), it was mitigated to some extent via price hikes (YTD 5.5%). Britannia will benefit from pickup in biscuit market, rise in MS, entry in new categories and demand recovery led by good monsoon and government initiatives. Maintain ‘BUY’.

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